South Africa LNG plans in pipeline

South Africa harbours plans to build an LNG import terminal and hire two tankers which can process the gas onboard, to meet demand for the fuel from power plants and prevent power-cuts, a consultant is reported to have said.

Eskom Holdings Ltd, which generates around 95% of South Africa’s electricity provision, and PetroSA, South Africa’s national oil company, plan to build an LNG import terminal and power plant at Coega Industrial Development Zone in the south.

The companies also plan to hire two so-called floating storage and re-gasification vessels, Poten & Partners revealed in a recently e-mailed report, according to news agency Bloomberg.

Power blackouts earlier this year cut output at South Africa’s gold and platinum mines and the country faces shortages until 2012. Eskom relies mainly on coal-fired generators and aims to increase the use of gas, with the planned LNG projects supplying as much as 3.4 million tonnes per year of the cleaner- burning fuel.

The challenges ahead for both the industrial gas business and energy future in Africa were highlighted at the gasworld African Conference 2008 in June, where members of the global industrial gas business gathered to discuss the potential and obstacles ahead.

While Africa has been rapidly emerging and making great strides of progress in its industrial development and gas & energy business, there is still room for improvement and accordingly, investment.

Tackling problems such as electricity security and power concerns are just some of the issues South Africa faces and a fresh reliance on LNG in future could provide an answer to these needs.

PetroSA may announce a winner for the proposed tankers in September, after inviting bids from Golar LNG Ltd and Bluewater Energy Services BV, the Poten & Partners report claims.

Eskom plans to bring another 293 MW of gas-fired generation online by the middle of 2009, in addition to the existing 445 MW.

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